Beacon Hill Lawmakers Push for More State Financial Oversight of Private Hospitals

Beacon Hill lawmakers are pushing for increased state financial oversight of private hospitals following the recent Steward Health Care bankruptcy. The proposed legislation, which was approved by the state House of Representatives, aims to prevent similar crises in the future by requiring hospitals to disclose large financial transactions, increasing fines for failure to report, and creating a new oversight commission.

The bill also includes provisions to regulate hospital finances, expansions, and closures, as well as setting new cost controls and providing additional funding for safety-net hospitals that serve disadvantaged populations. State Rep. John Lawn emphasized the importance of closing regulatory loopholes and stabilizing the healthcare system through increased reporting and information on hospital finances.

One key provision of the bill would prohibit Massachusetts hospitals from leasing property from private real estate investment trusts, a practice that contributed to Steward’s financial troubles. The legislation also increases fines and enforcement mechanisms to prevent similar situations from occurring in the future.

Steward Health Care, the largest private for-profit hospital chain in the country, recently filed for bankruptcy protection and plans to sell its 31 U.S. hospitals, including eight in Massachusetts. Governor Maura Healey has criticized the company’s management for greed and mismanagement, but reassured the public that hospitals will remain open during the bankruptcy process.

The bill now awaits approval from the Senate before it can be signed into law by Governor Healey. This legislation represents a significant step towards ensuring the financial stability and transparency of private hospitals in Massachusetts.